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Overview of Investing in Stocks

Here are four tables that give you a quick way to get an overview of investing in stocks. Each table includes links to important topics on buyupside.com.

Stock Ownership Alternatives
	Individual Stocks	Index Funds and Exchange Traded Funds	Managed Mutual Funds
Pros	Low fees Can outperform the market Build your own portfolio	Low fees Many sectors from which to choose Sectors can outperform the market Requires little of your time	Few outperform the market Requires little of your time
Cons	Pay commissions Can underperform the market Requires lots of your time	Can underperform the market	High fees Most funds underperform the market You may pay taxes on gains

Long-term Investing Strategies
	Buy-and-Hold	Diversify	Dollar-cost Average	Reinvest Dividends
Pros	Participate in the long-term growth of the economy and resulting increase of stock prices	Protection from Disaster	Buy systematically Buy on the upside Buy at low prices Requires little of your time	Accumulate additional shares without spending new money Requires little of your time
Cons	Can have poor short-term stock performance	Can own underperforming stocks	Buy on the downside Buy at high prices	Give up cash income from dividends

Beware of Wall Street Propaganda
	Wall Street Ads	Analysts	Talking Heads	Anyone Selling Financial Products or Advice
Pros	None	Some know their stuff	Some know their stuff	Some know their stuff
Cons	Want you to buy anytime May overstate performance Downplays fees and expenses	Not objective Often incorrect Untimely recommendations (buy high and sell low)	Most parrot party line Most speculate Most biased to the upside	Want you to buy anytime Many advisors have poor performance record

Risky Investing Choices
	Buy on Margin	Sell Short	Buy and Sell Puts and Calls	Buy on the Downside	Buy at Top	Own Only One or Two Stocks
Pros	Make money if stock goes up	Make money if stock goes down	Can make lots of money quickly	May buy at low prices before prices turn to the upside	None	Make money if stocks go up
Cons	Owe money if stock goes down May be required to pay back money very quickly	Lose lots of money if goes up	Can lose lots of money quickly	Most downside buy/sell combinations lose money	Lose money for a long time	Lose much of your money if stocks go down

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